On Social Systems

Sometimes a simple answer can “blossom” into so much more. Ever happen to you? It happened to me recently.

       The trigger was a simple Facebook question and answer regarding possible Democratic candidates. The issue revolved around Sanders/Warren, even though Biden is apparently the (hopefully short lived) front runner. The statement was:

“Bernie and Warren are not home free. To many of our voting public just don't understand socialism.”

       I was forced to reflect that the above statement may well reveal that even those who feel they do “understand socialism”, have little or no political real-world basis for that belief. Certainly, believing that the Green New Deal is a panacea for “what ails us” indicated profound ignorance of how we got here and how deeply entrenched a market economy is in Americans at even the small businessman level. Using the term Socialism, by implication and definition means (Oxford English Dictionary):

1) “A political and economic theory of social organization which advocates that the means of production, distribution, and exchange should be owned or regulated by the community as a whole.”  (Regulated really somewhat reflects the concept of a regulated market economy, but most Americans see “Owned” and reject that out of hand.

2) “In Marxist theory, a transitional social state between the overthrow of capitalism and the realization of Communism.”

       It's a sliding scale, and there's the problem. Communism is specifically called State Socialism. Other than the occasional 15 or 20 hippies in the desert with a bushel of pot, there has never been a really successful Communist state or, for that matter democratic state. 20th century experiments involved a violent transition from dictatorship (Russia, Cuba) to the dictatorship of the Party. In both cases, the population base subjected to the system was already used to centralized and dictatorial abuse, ergo saw not a whole lot of change, except among the extreme lower classes (better off) and the former upper classes (worse off. In neither case did the end result really resemble Marx’s economic vision since human desires for wealth, privilege and power soon became entrenched.  A Russian serf was already miserable, so Communism, or in fact, any system which ameliorated that misery was preferable, even if that mean sweeping the streets of Moscow in winter (yeah, really) or waiting months for consumer goods nationalized industries were incapable of producing fast enough. There are areas where a national approach of a universally necessary service or commodity (like healthcare) is appropriate, but if you want a bloody revolution, tell all the power companies, airlines, auto manufacturers etc. that they're going to become government owned.

        We have too long a history of entrepreneurial business to simply reverse course. There is way too much money in far way too many hands. The best course would be the agreement that as Wilson said, Regulation in the public interest is appropriate. Theodore Roosevelt, himself a Republican, but also the first to use the Sherman Act to legally limit the public abuses by businesses of the age of robber barons (See Rockefeller, John D.) had said earlier, “ When we control business in the public interest we are also bound to encourage it in the public interest or it will be a bad thing for everybody and worst of all for those on whose behalf the control is nominally exercised.” I think there may well be a great truth in that idea. It is possible to encourage entrepreneurialism while limiting its abuses. Dodd-Frank was a good faith attempt to do that. You saw how quickly Trump backed us out of Dodd -Frank.

        The Public Interest theory of regulation explains government intervention in markets and associated regulatory rules as “responses to market failures and market imperfections.” It argues that regulation promotes the general welfare rather than the interests of well-organized stakeholders.

A reasonable position by any candidate might be to amend this to include the idea that some societal issues, benefits and possibilities are so central to successful communities that they should also fall under that umbrella. The issue then becomes, “What idea/concepts/services and in what manner.” An example of this gone “off the rails” is the Green New Deal. It proposes huge expenditures, ignores existing technology while removing incentive to private enterprise in the field. If it is desired that the nation transition to a much lower carbon footprint (a wonderful idea), then all "green" tech need be considered, including “zero footprint” nuclear power. The resistance to this is driven by ignorance and superstition. Additionally, if one wants to encourage Solar and or Wind, then make it attractive for private entities to do so. Let them raise capital, and if necessary be given tax incentives rather than creating more federal bureaucracy to do the same. If we learn anything from Denmark it should be that an all-out government wind program will drive energy costs sky high (highest in Europe and three times US average)

        Without massive social upheaval, (and I mean literally) the neutral ground would be to fairly regulate what private industry can and can't do. Sanders verges on being an out and out Socialist and, in my opinion, almost as reactionary to the left as is Trump to the right. In point of fact, based on anecdotal things from those who actually have worked (or tried to work) with him, he is abrasive and doesn't play well with others. Democrat Centrists would probably not support him.

         Asking the American public to take the kind of tax hit which a truly Socialist agenda would demand would be political suicide. Britain went that route to some extent and backed away from it due to economic failure, more than anything. Nationalized UK industries, at one time included coal, iron and steel, electricity' and gas, transport by rail, civil aviation, and some others. Note, however,  the absence of national healthcare, which does work, from that list!! The return to privatization was trying and perhaps we in the US could learn from Industrial Socialism’s failure in our closest ally, rather than reprove that it doesn’t work well.

          Denmark also has a huge marginal tax rate, as does Sweden and Norway, even with Norway producing most power by hydro. The "Green New Deal" sounds better than the unreality of funding it is, but is fatally flawed because it rejects nuclear power out of pure lack of knowledge.

        As a response to the original question re: my opinion on a realistic democratic ticket” I think a Warren/ Buttigieg ticket could win but feel Sanders would  condemn us to four more Trump years. Remember, we’re not talking to a politically sophisticated or informed country as a whole, and Trump supporters are at the bottom of that barrel. They will not be won ever by any non-rightist candidate, therefore any split in the democratic ranks will be tragic. What I find very hard to understand is why we know more about what AOC, in her relative ignorance and naivete, believes than we do about Professor Warren. She is a self-made woman of prodigious accomplishment and intellect. Like AOC, she put herself through college, unlike her, she did it as a working wife and mother. I feel it's time to make specific statements and draw firm lines disassociating herself  from the more radical socialism with which she is being labelled and the fairly and consistently regulated market economy which the majority of Americans find acceptable, even though many are so "economically challenged" that they know not what they know not. There are other socio/political/economic choices than Robber Baron or Socialist. Hell, we all thought socialism made sense when we were in college.... then we grew up and went to work for a living.

        A classic example of what I'm talking about is the electrical power industry. There is a government owned utility- the TVA. The TVA dams were built to provide power in areas of the mid-south where private utility companies had no lines. Using hydro, TVA retails power at a relatively low cost, but not really cheaper than other non-government hydro providers elsewhere. Electrical Utilities, like communications corporations, are regulated and legally restrained from rate increases which are unjustified. States do the same thing for utilities and insurers for example.

        If Orlando Utilities wants a rate increase, they must provide justification to the Public Services (or Public Utilities, titles vary) commission, which may reject such request. This is government regulation in the public interest of a private utility. Allowing a corporation to build and produce power by raising capital and then making a regulated fair profit eliminates the huge outlay of public funds such efforts would require. The cries of abuse we hear about drug pricing could be resolved by standing up to Big Pharma and using a "commission" to review pricing. It doesn't take Socialism to do that, it takes the willingness to ignore lobbyists and do the right thing. A good beginning could be had by banning all lobbyists.

My dear friend responded with: “Mike,  I understand your points but, and please correct me if I am wrong, I don't think Bernie wants total socialism; I think he wants a socialistic Healthcare System and to fight the big Pharma which has gotten way out of control. Please enlighten me.”

ME: “XXXX, that may be, but the message gets lost in the word “Socialism”. The larger issue is that while he does well with crowds, he apparently does far less well with those who he really needs - his peers. Here's a guy who has been sort of the  "cranky old uncle"" while not building any consensus with members of the organization. I just don't see him as now being able to build consensus. He's been an independent who, as president, would need support from those, some of whom he has built a career criticizing. He also supports free college and the Green New Deal which, as I said, is naive at best, and more like downright foolish.

Response: Mike, free college sounds great, but I don't know where the money will come from, but other countries do it.

ME: “XXXXX, they do it with high taxes. And yes, other countries do it, but if your taxes were as high as, say, Denmark you'd scream. The myth, however, is that “everyone should go to college.” 

       Tech schools are, for many, a better idea. The guy who fixes my a/ c starts at about the same pay as a Florida beginning teacher in many cases. 

       There will always be service sectors in various areas which require no college and which, in many cases, students can graduate high school ready to work. Another example: a starting apprentice electrician should expect to earn in the same general area as a beginning teacher (in Florida) – mid $30,000 range, let’s call it $35,000.  However, the teacher will have had to first pass four (more likely five, now) years of school and pay for that while earning nothing. In that same five years, the electrician, earned $175,000 and may well be a journeyman, (after 3 to 5 years apprenticeship) earning in the high $50ks-low $60ks depending on where they work. Even if the electrician doesn’t progress to master electrician ($83k, even in Florida) the teacher with five years of college will never, ever catch up! There were, in 2014, 628,800 master electrician jobs in the USA, requiring only a high school diploma or equivalency.

       The income is even higher for 2-year tech diploma grads in such fields as radiology tech. A licensed massage therapist in Florida with as little as 8 months to a max of 18 months training will earn, from the get-go, in the mid $45 k range and never have to grade homework.

       And finally, one last example, using my self. I entered the Navy with no college degree and remained enlisted throughout my career. A Navy enlistee today, who enlisted in 1998 and progressed as I did, would have, if a nuclear trained individual as I was, probably been paid additional $50 to $60,000 dollars (actually up to $100k in reenlistment bonus over and above salary. If that person, reached pay grade E-9 and was, as I was, career submarine and sea pay designated, they would earn well over $120,000 annually in pay and allowances, with increases for each year from 20 to 30. At 30 years of service, at say, age 48, they could retire with right at $70,000 annually for the rest of their lives. This doesn’t include premium health insurance for life, which reverts to a Medicare supplement at age 65. Pretty much means no medical bills after 65. Ever. No college required, just pass high school algebra with a C and be willing to work. The teacher, in Florida after 30 years, never having made, after about 15 years, as much annually as the enlisted man, could look forward after 30 years at say age 54, or so, to a retirement of $33,000 (yeah, that’s less than half) and pay for health care insurance.

No, not everyone needs to go to college, but if it were completely free, I’d be willing to bet that many more will try and fail

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After I finished the text, I decided to include a graphic with explanations for whomever cares.